This point was expected to be reached years from now,
but a modest curtailment in credit card borrowing, combined with a
massive jump in student loan borrowing greatly accelerated the
schedule. Each of these categories comprise approximately
one-third of total consumer debt, which stands at $2.4 trillion.

It is important to note that while these two types of debt weigh
roughly equally upon the citizenry, media coverage of credit cards
exceeds coverage of student loans by a factor of approximately 15-to-1
based on unscientific news surveys conducted since 2007.

While credit card
borrowers enjoy the fundamental consumer
protections afforded all other borrowers with all other types of debt, federal
student loan borrowers enjoy almost none of these
protections.
Not bankruptcy protections, not statutes of limitations, not
truth in lending laws, not state usury laws...non-profit guarantors are
even exempt from fair debt collection statutes. In additions, the
lending system enjoys collection powers that no no equal. There
is no appeals process for defaults. About 20 cents of every
dollar
repaid by borrowers whose loans were defaulted are taken by these
guarantors (or the federal government) before anything is applied to
principal, interest, etc. Borrowers wages, Income tax returns,
and even Social Security and disablility income are routinely garnished
without a court order, and regardless of any legitimate claims they may
have about the propriety of the default. Borrower's ability to work in
their field can be taken away through state professional license
suspension, and other related state and federal policies regarding
defaulted borrowers...In a very real sense, defaulted borrowers are
given the choice of either finding a way to repay a vastly inflated
debt, or face the rest of their lives as indentured, marginalized, second
class citizens.

And make no mistake:
Just as the American Public was misled into believing that
student loan defaults were low, and getting lower (when in fact,
the default rate for student loans is at least 1 in 4), the
oft-repeated propoganda about defaulted borrowers being a burden on the
taxpayers is equally if not more incredulous. Please note: where
the recovery rate for defaulted credit cards, for example, is about 25
cents on the dollar, the recovery rate for defaulted student loans is a
whopping 123% The system is MAKING, not LOSING
money on defaulted loans.!!

Taken together, this
revocation of consumer rights has produced an inherently predatory
lending system that succeeds when the students fail, one that wields
powers over the citizenry the likes of which have never been seen in
this country, one that causes administrative and bureaucratic
malaise, poor federal oversight, and
other systemic failures at the highest levels. More importantly,
this perversely incented system offers no real defense against
inflation, and we have seen the results on that front over the past
couple of decades. Most importantly,
this lending system is literally destroying lives,
families, and
communities....

It is our hope that this issue will be exposed to the same level of
media scrutiny as is given to credit card debt, and even subprime home
loan debt. It is only under the light of serious investigative
journalism that this problem will be identified correctly, and solved
appropriately.